X Strategies, the political consulting firm that runs several of President Trump's most visible social media accounts, filed a federal lawsuit on Monday accusing co-founder Derek Utley of embezzling at least $5 million from the company to finance a luxury lifestyle and a gambling addiction.
The complaint, lodged in South Florida federal court, alleges that Utley, who served as chairman and chief financial officer, exploited his exclusive access to the firm's bank accounts and financial records to orchestrate a yearslong scheme. According to the lawsuit, the theft began in 2021 and continued undetected through frequent inter-account transfers and fabricated financial documents that masked personal purchases as business expenses.
X Strategies manages the Trump War Room and Team Trump accounts on X, and also assists with the president's TikTok presence. The firm was founded in 2017 by Utley, then 32, and Alex Bruesewitz, then 19. Bruesewitz, a prominent MAGA ally and adviser, is now a key architect of Trump's online strategy.
The lawsuit claims Utley spent company funds on luxury sports cars, designer clothing, and first-class travel. It further alleges that he maintained an extensive gambling habit, spending 200 days in a single year at a South Florida casino, where he wagered tens of millions on slot machines. In that period, the firm says, he won $26 million but lost $29 million, leaving X Strategies to cover the $3 million shortfall.
The scheme reportedly unraveled after the firm hired a new president, Michael Seifert, who noticed that cash on hand was far below reported revenues. Around the same time, the company learned that Utley had called a third party from a Las Vegas casino while highly intoxicated, requesting an urgent wire transfer to meet payroll the next morning. The lawsuit alleges that Utley had actually suffered a massive gambling loss and sought additional funds to continue betting.
That incident triggered an internal audit that uncovered suspicious transactions and payments to Utley himself. According to the complaint, when initially confronted, Utley denied taking money, but later admitted to Seifert that he had stolen millions.
Utley stepped down as chairman and CFO in April but briefly stayed on as an employee. He was later fired for allegedly submitting fake medical records to obtain six months of paid leave.
In a statement to Politico, which first reported the lawsuit, Utley said, "I dispute these allegations in the complaint and will address them through the legal process. I have no further comment at this time."
The lawsuit includes claims of civil racketeering, civil theft, and fraud. The firm is seeking unspecified damages. The case adds to a growing list of legal and financial controversies surrounding Trump's political and business networks, including a San Francisco lawsuit against Trump Media over paid early access to Truth Social posts.
